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Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin

 
Optimistic Aussie from Perth
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Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
Hello all, im back for a while.

Starting work in the mining sector soon,( IF the economy doesn't bomb.. it will soon enough, gulp ) but got a month or so before i leave by the looks of things now. I hope. :-)

Al my plans went up to shit lately, but all is good.

I see the $$HIT is about to hit the fan well and truly with the economy, yet many will keep watching comets instead. HELLO!

Sorry ladies and gents, but we need a wake up call.

And it's not just the housing bubble ready to go pop.

Still, sadly, all too many people will deny it.



The Great Leesburg Bust of 2006
Bankers Association Warns of Bust

by Lyndon H. LaRouche, Jr.

[link to www.larouchepac.com]

part post

April 8, 2006

The world as a whole is currently teetering on the edge of the greatest financial collapse in modern history. In keeping with the nature of the freedom of the human's power of choices, there is no fixed date for this already onrushing event. However, since even the freest of human wills is bound within the limits defined by the reality of current processes, the crash will be soon, perhaps very soon. Nonetheless, most people will deny this reality until after the crash has hit with hurricane force; after the crash has come, even then, many of them will continue to deny what has occurred, that for a lapse of time of months, or, in some cases, as after 1929, for several or more years.

So today, when the basic economic infrastructure and industry of the U.S.A. have been eroding visibly since 1977: at a time, even now, when entire states and regions are already in a deep physical-economic, depression, there are many poor souls who continue to support an intellectually crippled President George W. Bush, Jr.'s insistence that our actually collapsing U.S. economy is growing. When the crash hits with full force, as it will soon, many of these protesters will fly into a rage, tearing themselves to pieces, as did the fabled Rumpelstiltskin, denouncing every statement and every thing which points out that the great crash has actually occurred.

I have observed, especially since January 1996, that, there was then, and, is still now, a strong tendency toward a virtually schizophrenic form of quality of disassociation in reaction to any hard "bad news" about the economy. This wishful neurotic tendency was widespread, and has spilled over even among those associated with me here in the U.S.A., and also abroad. I can report from such close experience, that the form this denial takes, has often occurred in the form of an emotional disconnection between the discussion of a forecast financial crisis, and the sense of the real world of personal daily life. Such is often the state of mind, among that generation of modern sophists born between the end of World War II and the deep economic U.S. recession of 1957-1958.

Even forecasts presented by persons with the greatest relative authority in this field, as my record in this field is now an outstanding example of such success, are treated by today's popular sophists as "merely academic" matters, even when the forecast might involve a threatened extinction of entire communities. Such is the case in the, virtually doomed micro-societies represented by the mushrooming "Hollywood set"-style hamlets of Loudoun County, Virginia. Many, even in financial "ground zero," otherwise called Loudoun County, will protest that their mortgage is solid, even at the point assessable market value of the mortgaged property has fallen way below the marketable value of that item.



It is notable here, that I have made less than a dozen professional's forecasts in the course of my career as an economist. The first was my 1956 near-term forecast of a February 1957 recession. Each of these significantly less than a dozen forecasts, beginning Autumn 1956, have each and all either come true, or are now currently in the process of coming true in an appropriately timely fashion. There is no other person on the public record who has a more consistently successful record than I do on this account, not even a record which could approach my own nearly perfect performance in this matter.

The world is now threatened, during the immediate months ahead, with the most severe breakdown in global economy since the so-called "New Dark Age" crisis set off by the mid-Fourteenth-Century crash of the ultramontane Venice's tool, the "hedge funds" of that time, then known as the Venice-controlled Lombard League's banking system. What is rumbling now from under the burgeoning, saturated drain-fields of Loudoun County, Virginia, is a twitch of panic to come. Week by week, there is, an accelerating rate of a margin of unsold, empty houses, an ironical warning of a great crash of Alan Greenspan-created mortgage-based-securities bubble: a crash about to hit with panic force.

Some silly people will say that I am "threatening to talk the economy into a recession." Denying the existence of a crocodile already moving about in the children's bedroom will not make the hungry crocodile go away. Matters have reached the point, that some very responsible Federal and related banking circles are now issuing carefully crafted warnings to the witting, of the great U.S. real-estate crash about to strike, probably as early as this Summer, or even, perhaps, earlier.

Especially now: no relevant kinds of responsible agencies, here or in Europe, have any sane reason to doubt that my forecasts are to be treated as representing exceptional authority in such matters.

For example, my first long-term forecast was made during mid-1958: that if the trends established over the course of the 1950s were continued during the sweep of 1960s, we must expect a series of monetary crises in the world system by the second half of the 1960s, followed by the arrival of a threatened breakdown of the Bretton Woods monetary system itself. I reaffirmed that forecast, with some slight refinements during 1959-1961 and 1965. The 1967 Sterling and 1968 Dollar crises were typical of the developments leading into the 1971-72 dissolution of the Bretton Woods system.

My second long-term forecast, was first published in August 1971, in the immediate aftermath of the Nixon Administration's wrecking of the Bretton Woods system. I stated, at that time, and later, up to the present moment: that the policies adopted by the Nixon Administration confronted us with the long-term prospect of a threatened fascist transformation of the world financial-political system.

That transformation, as I described in that forecast of 1971, has shaped the long-term economic-policy trend in the Americas and Europe to date. For this nightmare, the role, in pushing deregulation, by Zbigniew Brzezinski as Trilateral Commission leader and Carter Administration National Security Advisor, has been more crucial in long-term effects than even the ruinous actions of the Nixon Administration. The role of Dick Cheney as Secretary of Defense under President George H.W. Bush, and as Vice-President under the nominal President George W. Bush, Jr., when compared with the ultramontane policies for Nazi-like privatization of the military, associated with former Pinochet-backer Felix Rohatyn, are the most notorious expression of the lunge toward an attempted global fascist tyranny under "globalization" today.

Now, the crash itself can be prevented no longer. In earlier times, there had been options for preemptive action by the U.S. government which might have changed the system itself in appropriate ways, before the full-scale panic-phase had actually occurred. President Clinton was thinking in such directions during September 1998, but the relevant political circles attempted to remove him by a Bush-circles-led impeachment campaign, and no effective action has been attempted by the U.S. government since September 1998.



As we should have recognized by the sudden, February 2006 backdown to Bush, Cheney, and Rohatyn, by the Democratic forces of the U.S. Senate, the political system is no longer prepared, at this time, to take any of those effective forms of timely action which were under consideration in 2005. There is no significant current effort in either party, to take the needed action to deal with the onrushing general breakdown-crisis—until after the crash has actually occurred. Amelioratives of mass suffering of the suddenly unemployed auto-industry workers is like providing pain-killers instead of the surgery which is required.

You might have supposed that experts in the field, especially persons associated with me, would have recognized my forecasts as warnings of the conditions under which they, personally, might expect to live in the forecasted near-future time to come. Some did, but, until now, most of the relatively older generation in power have not acted, and do not consider themselves situated in a position of advantage in which they would attempt to launch competently preventive action.

In most circles, such as among the members of the U.S. Senate, for example, the post-January 2006 disassociation by the dupes of former Pinochet-backer Felix Rohatyn and his like, is more consistent and clearly manifest still today.

It is now, as typified by the statements of John M. Reich and others, that official and related U.S. banking institutions have issued a very sharp warning of a threatened crash of much of the U.S. mortgage market. The Business section of the Washington Post carried an accurate summary of this official warning. Yet, even the editors and readers of the Washington Post react, as if emotionally and intellectually disassociated, acting as if to say, "So what; it could never affect me"! Granted, the Post is noted for its adherence to sophistry; but, there should be a point at which even modern sophists in the tradition of Pericles' and Thrasymachus' self-doomed Athens bow to the unavoidable importance of the simple truth of their own situation.

Indeed, the Post, whose controlling interests are deeply involved in what might be deemed legalized real-estate scams in the region, is among the institutions which might be swept away in the outgoing monetary-financial tide.

I explain as follows:
John M. Reich's Warning

With delicious taste of irony on my tongue, I can report that page one of the Washington Post Business section of Friday, April 7, 2006, featured a warning to the such locations as the vicinity of Leesburg, Virginia, of a threatened major real-estate bubble collapse in certain parts of the U.S.A., especially the area of the real-estate bubble built up around the nation's capital. The Post account features the warning presented to the New York Bankers Association by John M. Reich, the director of the Office of Thrift Supervision.



The Post's account includes the following three paragraphs, which point accurately to that threat of the "Great Leesburg Bubble" against which I have warned publicly, repeatedly since the beginning of 1996:

"About two-thirds of all people who bought homes in the Washington [D.C.] area in 2005 used interest-only or option mortgages, many of which have adjustable interest rates, up from 2.5 percent in 2000, according to statistics compiled by Loan Performance, a real-estate information firm. These loans generally have lower monthly payment requirements than traditional fixed-rate loans, at least at the start, but carry the risk that payments could jump steeply.

"Local mortgage brokers say borrowers are taking out these loans because it is the only way they can afford to buy a home today. These loans allow borrowers to pay just the interest on the debt, not to pay down the principal, which reduces the monthly expense at the beginning of the loan term."

According to the Post account's third paragraph of these three, Christopher Cruise, a Silver Spring-based mortgage trainer who runs classes for lenders and regulators around the country, stated, "Without these products, homes couldn't be purchased." That paragraph concludes by citing Cruise: "If they are taken off the market, it could precipitate a disaster of epic proportions."

There is nothing new to me or other leading U.S. economists of whose views I know, in the warning delivered by that edition of the Post. As I have warned repeatedly since the January 1996 beginning of the Democratic Presidential Primary campaign, the real-estate bubble described by Reich and others is simply a warning to the witting that the great financial bubble-collapse of 2006 has reached the point it is ready to burst almost any time soon, and that the Washington, D.C.-centered region is one of the most important areas to be struck by a financial-collapse disaster beyond the imagination of most among the many wishful citizens in the region still today.

Every leading economist of importance, and relevant financial specialists, have shared the expert knowledge for some time: that the state of Alan Greenspan's cancerously layered U.S. financial bubble in mortgage-based securities, represents a monster which could suddenly bring down the U.S. economy, and, could, as well, set into motion a world-wide, hyperinflationary collapse of the present monetary-financial system outside the U.S.A.

When the bankruptcy of leading banks behind the present global hedge-fund bubble is taken into account, the world monetary-financial system is presently in such a state, that nothing less than putting the IMF system itself into bankruptcy reorganization, would be indispensable for preventing the collapse of the world economy. This would be a collapse into a planetary new dark age comparable to that of Europe's Fourteenth-Century collapse of the Venetian system represented by the Lombard League's "hedge-fund" peddlers, such as the Bardi's infamous "Biche" and "Mouche."

The most significant thing about the Post's Business-section report, is that leading circles around the Federal Reserve System, have signaled, that now is the time to rush a warning to those insiders of the financial community who need to take action to minimize the damage this oncoming crash will deliver to their particular interests. Among such circles, the feasible economic goal of investors and managers in the wake of super-inflationary Alan Greenspan's departure, is no longer merely loss-minimization; it is now bare survival.

Therefore, I say again, that the center of the coming mortgage-crisis storm in the area of the nation's capital, is Loudoun County, Virginia, where the most extremely dangerous over-stretching of mortgage obligations has occurred. Not a whisper of a sense of appropriate reaction to that reality was overheard from the streets of Loudoun County as the Post report was being circulated in this area Friday and Saturday.

One thinks of a story about a woman who has cooked the meal and set the table for the husband who had deserted her a decade or more ago. "But, he deserted you more than ten years ago, Mom!" her daughter pled.

"I know that," her mother replied, but continued to set that same place at the evening table, at a measured, much rehearsed pace, as she had done so for thousands of desperate evenings before.

That is the way an all-too-typical Loudoun County resident, for example, responds to the reality of the onrushing crash of the super-inflated, John-Law-style, mortgage-based securities bubble.

It is not only the ordinary citizen in the middle to lower income-brackets, who reacts with indifference to plain evidence that the great housing bubble is about to pop. Look at the higher political ranks of society, where they ought to be better informed. Look at the rate of denial among these circles, despite the fact that the most important economists and financial circles know of my forecasting successes. For that reason, to understand the presently desperate situation, you must look at the state of hysterical, official and other denial of what has become, among serious professionals inside the U.S.A. and in many leading circles abroad, my widely known economic forecasting over more than four decades so far.

It is therefore important to reference, once again here, some of my now proven earlier published forecasts of this trend in this direction. My warnings of the Ponzi-scheme-like characteristics of recently retired Federal Reserve Chairman Alan Greenspan's role in a giant, cancer-like U.S. real-estate bubble, include the following warnings delivered by me in published statements focussed on a first-hand overview of the situation in the Leesburg-centered Loudoun County.
I Warned You!

I had already warned publicly, repeatedly of the threat to Loudoun County in a recent Washington, D.C. webcast. Consider several typical and prominent instances of this. (See box.)
1. The 'Triple Curve': What It Means

My first, and often repeated warning of the coming general financial breakdown-crisis of the world's current monetary-financial system, was the featured element of the address which I delivered at the 1996 public conference at which I launched my campaign for the Democratic Party's 2000 Presidential nomination. I explained the nature of the oncoming general financial crisis of the world system by a rather simple chart, which I named "The Triple Curve" (Figure 1).

That chart, as shown here, has four explicit elements. First, there is an hypothetical straight line, which corresponds to the assumption that the U.S. economy had continued to operate in constant relative, per-capita value of financial, monetary, and physical values, comparable to the ratios of the early 1970s, until as late as 1977. The latter point, 1977, is the point at which the average physical income of the lower eighty percentile of the U.S. population's households had definitely proceeded to collapse over the 1977-1996 interval.

The three curves featured in the chart were; first, the declining of the real (physical) income of the households of the lower eighty percentile of the population, as measured in combined public and private components of net real income; second, the soaring rate of accelerating financial inflation; and, third, the soaring rate of the monetary inflation now being driven, most visibly, by the combination of real-estate bubbles and the so-called "hedge funds." This portrays a type of economic function which has current characteristics akin to those of the post-World War I Germany under Versailles Treaty terms over the 1921-1923 period, leading into the sudden explosion of hyperinflation during the second half of 1923 (Figure 2).

The particular feature of the 1996 Triple Curve presentation, was that by 1995-1996, the Anglo-American beneficiaries of the 1989-1991 collapse of the Soviet system had neared the limits of the possibility of continued looting of the former system. In Western Europe, for example, the Maastricht conditions which Britain's Margaret Thatcher and France's President Mitterrand imposed on post-1989 Germany, induced a forced shrinking of the economy of Germany, while imposing a virtual paying of tribute, by Germany, tribute issued by Germany as tribute paid to imperial overlords, paid to support the declining economies of the United Kingdom, France, and others. Although the states of Eastern Europe have enjoyed political freedom from Soviet hegemony, the economic conditions in those regions of Europe today are usually far worse, physically and otherwise, than under Soviet hegemony!

The global monetary-financial crises of 1997 and 1998, the so-called "Asia Bubble" crisis and the "hedge-fund" blowout of August-September 1998 are typical of the kinds of trends against which I have warned in the January 1996 presentation of my Triple Curve.

In the aftermath of the August-September 1998 hedge-fund blowout, it was a relatively short run to the 2000 end of the Y2K sophistry, and with that, the beginning of a qualitatively new phase in the great financial bubble, the global financial-derivatives bubble, which Paul Volcker's successor Alan Greenspan had launched, in 1987, as his proposed solution for what I had precisely forecast, during the previous Spring, as the U.S. stock-market crash of that October.

What Greenspan launched was a descendant of the John Law "bubbles" of early Eighteenth-Century England and France. His immediate objective in this action was to bail out leading banks which had been drained by the process leading into the 1929-style stock-market crash of October 1987. The included result was the birth (and death) of the Enron which was to play a leading part in funding Texas Governor George W. Bush, Jr.'s campaign for the Republican Party's U.S. Presidential nomination and subsequent election. In effect, Greenspan legalized what had been considered the form of crime for which Enron was brought down. In effect, Greenspan's actions flooded the banking system, in particular, with a purely fictitious form of financial asset, an asset which he, in effect, legalized. This was used, among other purposes, to flood the emptied coffers of the leading banks of October 1987 with purely fictitious financial capital.

One of the pivotal features of Greenspan's operation was to transform Fannie Mae and Freddie Mac into engines of a mortgage-based-securities system of speculation, and to use that mechanism as a way of creating an intrinsically hyperinflationary form of apparent real-estate-mortgage boom: thus creating a new version of an Eighteenth-Century John Law-style bubble. That bubble has now reached the point at which it has been overstretched to the popping-point.

What has brought the Loudoun County real-estate wing-ding to the verge of catastrophe, is the global effect of Greenspan's blowing of bubbles. What has just happened in poor Iceland illustrates the point.



The possibility of preventing Greenspan's bubbles from popping during the 1990s, was chiefly the combination of post-1989 looting of the physical assets of the former Soviet Union and Comecon (and also Germany), and, above all, the willingness of the governments and banking systems to launch and sustain what is often identified as Japan's overnight zero-interest-rate lending policy.

Credit borrowed from Japan is used to buy blocks of currency which are then loaned, at significantly greater lending charges, to private firms and governments in other parts of the world. This practice of layering one stratum of fictitious assets on top of another, has become known as "the carry-trade." This "carry-trade" has become the principal engine of today's worldwide hyperinflationary impulses, as in the price of petroleum, and precious and other metals. All of this depends upon the use of a U.S. and British system of mortgage-backed securities, and risk-insurance hedges.

As long as the system depending upon the continued expansion of the carry-trade functioned, it was possible to maintain the mortgage-bubble in such locations as Loudoun County, Virginia. However, it is now recognized that Alan Greenspan's hyperinflationary games must be ended. The soaring prices of primary materials, shows us that the world has already entered the phase of growing, second-order, hyperinflation, a state of global affairs which must be fairly compared to what happened in Weimar, Germany, during the second half of 1923. The greatest single threat to the world's monetary-financial system today, is the onset of a Weimar, Germany-like, global, hyperinflationary spiral, a spiral which has now reached the point of over-ripeness at which it could blow out the entire world system during a short period of time, even within the remaining months of 2006, probably by the time of the U.S. mid-term elections, probably as early as Summer, if it were not triggered by a virtual accident, at almost any time between now and then.

Greenspan's actions to that effect must be compared with the way in which Weimar Germany led itself into the great hyperinflationary explosion of late 1923. There are differences between Germany then, and the world of the 1987-2006 interval; but, the principle is the same. There are some leading circles in the U.S.A. and elsewhere who are not so ignorant, or stupid, as not to recognize the fact of the current situation. If some of them do not maintain public silence on what they know, that is because they fear that no government, or leading political party of the U.S.A., the British Commonwealth, or western and central continental Europe would be willing, voluntarily, to take appropriate measures for bringing the crisis under control. Some among those leading circles consider the case a hopeless one. Even brave soldiers are not wont to fight when their governments, such as the Bush Administration today, have already surrendered the nation to the financier rogues of the hedge-fund system.



So, the effort to check the rate of increase of global hyperinflation impels well-informed central bankers and comparable others, to say, "Put the lid on hyperinflation, if you can!" This means, shutting down the mechanisms of hyperinflation on which Greenspan's mortgage-based securities inflation was based. This means a crushing of the hottest areas of investment in real-estate speculation. The wild-eyed gambles in the Washington, D.C. area, are the warning to shut off the spigot. Waves of bankruptcy are soon to be expected. Loudoun County beware!

continued here
[link to www.larouchepac.com]
OAFP (OP)
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04/18/2006 08:06 AM
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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
What's going on BOSS?? Double post?? and it's slows to a stop/crawl ... just now.

Bugs still?
Anonymous Coward
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04/18/2006 08:19 AM
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I thought you had left us for OAP, what happened?
Anonymous Coward
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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
"left us for good" that should read.
Optimistic Aussie from Perth  (OP)

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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
This deserves a snip.


"A good sovereign government can always create a new currency, on a new basis, and can also manage the transfer of imputed value from what should be salvaged of the old to find its more durable, new incarnation in the new monetary system."

Ape or Man?
************

Such reflections on the present perils of humanity should return our discussion to the topic with which this chapter of the report began: the essential distinction of man from ape.

The recent, presently accelerating soaring of prices beyond all rational determination of incurred physical cost of production per capita, expresses the inherent worthlessness of money as a standard of economic value. It was by regulating money, most notably as this was done in the post-1932 U.S. until the radical changes of the 1971-1982 interval, that a pattern of "fair trade" was induced to the effect of keeping the relative prices within ranges which did not depart violently from the ratios consistent with physical, as distinct from monetary values. It was deregulation, as launched during the 1971-1982 interval, which wrecked the U.S. economy in ways for which we are sorely paying today.

This contrast between physical and monetary values implicitly poses the question: What are the values which should govern the outlook of the individual and of the institutions of society? Money—price—can not meet that requirement. Therefore, what does?

The answer to that question is, essentially: What is the difference in value between an ape and a human individual?

1. Unlike the beasts, the apes included, the human individual's cognitive powers enable that individual to discover and to know universal physical principles, such as Kepler's discovery of gravitation, or the ancient Pythagoreans' knowledge of Sphaerics. These discoverable principles are universal in the sense that the universe is a finite universe, as Riemann and Einstein insisted, in which these discoverable universal principles, since they are universal, are thus extended implicitly to the limits of the universe, and bound the universe as a self-bounded universe.

2. These principles are not sense-objects, but they bound the universe in which sensed objects exist. It is through the application of the mastery of these principles, that mankind increases our species' power to exist, and raises the quality of human individual existence.

3. These principles are of two classes. Most simply, they are universal physical principles, as the ancient Pythagoreans and Plato understood this. They are also the universal principles associated with Classical artistic composition. In the first instance, as universal physical principles, the individual knowing mind addresses the domain of non-living and living processes as such. In the second instance, as universal Classical artistic principles, the subject of the individual person's creative powers is social processes as such. Otherwise, they are the same quality of principles of human cognitive activity.

4. The existence of these principles in human knowledge, defines the human personality as implicitly immortal, as an immortal being temporarily occupying an animal-like body. It is this sense of intimation of immortality which defines the normal standard for a moral human individual.

The moral individual does not act under blind compulsion of service to the mortal needs; but, rather, is motivated by a sense of bonds of trust between the living individual and both prior and subsequent generations. Hence, the passion which we rightly identify as patriotism, which is essentially a devotion to the interest of prior and future generations, as that interest is most immediately located in the sovereign society of which one is a part.

Therefore, it should be apparent, that the great problem of our society presently, is that it, like most of its fundamentalist cults, has lost a sense of obligation to the immortality of the human individual. It has thus lost a sense of connection to those immortal values, as typified by universal and fundamental principles of physical science and Classical artistic composition, on which the moral character of the individual member of society depends.

The characteristic of U.S. and European society, in particular, since the death of President Franklin Roosevelt, but, especially since the later 1960s, has been a radical shift in prevalent social values from a moral society, to a society, like the Athens of Pericles, which had doomed itself by that cult of popular opinion, which is otherwise named sophistry. The individual who can not stand for truth, even in defiance of prevalent lies or merely follies of his contemporaries, is not a truly moral person, but a man or woman who has hocked his or her soul in today's great and grubby pawn-shop where popular opinions are bought and sold.

With the currencies of the world already rendered more or less worthless by the great waves of hyperinflation now in progress, to what shall the citizen cling as economic values? "Where can I put my money!?" the citizen cries. In what does one invest when money is about to become virtually worthless as a surrogate for value. The answer is, that society shall and can live on, when monetary systems die. A good sovereign government can always create a new currency, on a new basis, and can also manage the transfer of imputed value from what should be salvaged of the old to find its more durable, new incarnation in the new monetary system.

Mass evictions in Loudoun County, are an intolerable alternative. We must save the habitation, and thus the social structure of our functioning communities, despite the nominal bankruptcy of mortgages which have been wildly inflated to the point that the prices of the real estate are virtually worse than meaningless. We can do this without wrecking any of the essential, pre-existing institutions of our society; to see our way clear, morally, to make that necessary adjustment, we must arouse in our fellow-citizens a proper sense of the immortality of the human individual soul, the sense of the human individual as a creative soul in the likeness of the Creator and with the mission the Creator has assigned to men and women.

With that view, we can look the terrible in the eye, and conquer it.
Optimistic Aussie from Perth  (OP)

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04/18/2006 08:22 AM
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"I thought you had left us for OAP, what happened?"

ME too, job plans all changed. Month or so to wait now.
Optimistic Aussie from Perth  (OP)

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04/18/2006 08:25 AM
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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
Just about to search for the Boston Globe story. Will be amusing im sure.

THE NEW LIBEL AGAINST LAROUCHE:
Felix & Fascism

by Lyndon H. LaRouche, Jr.

April 16, 2006

Frankly, if you do not think of Felix Rohatyn as a fascist, you do him a grave injustice. Both Felix and the wildly libelous attacks on me which have surfaced in the aftermath of the Senate confirmation of the Supreme Court appointment of Justice Samuel Alito, put the essence of filthy Felix on today's global display. By all rational standards, Felix is a fascist who considers me a prominent threat to his currently larcenous schemes.

So, in keeping with Felix's fears on that account, the Alito confirmation has been followed by an accumulation of various lunatic libels recently featured against me in prominent mass media and comparable other locations, not only in a bankers' Boston, Massachusetts, but also in a featured hoax published in the Neue Zürcher Zeitung, in prominent Leipzig, Germany pro-fascist and related circles, in a leading France TV channel, and other relevant places.

As noted by one person close to me, what is intended by those outlets as attempted defamation of me, relies heavily on the precedent set by the notebooks of E.T.A. Hoffmann and the archives of Charenton.

Felix's credentials as a fascist are clearly established. The best-known career connections of that sort, are traced from his association with the U.S.A. extension of Lazard Freres of the Hitler period's Banque Worms operations. Felix is notable from the history of the 1970s for his role in "Big Mac," but also has a much uglier prominence as a key banker in the operation backed by such as George P. Shultz and Henry Kissinger which brought the neo-Nazi General Augusto Pinochet to power in Chile, and unleashed the neo-Nazi mass-murder campaign in the Americas' Southern Cone during the first half of the 1970s. He is also a key ally of Vice-President Cheney in the scheme for transferring the power of the U.S. military from the control of constitutional government, to a system of private armies, of Cheney's Halliburton, et al., modeled upon Adolf Hitler's program for replacement of the German Wehrmacht by the Nazi SS.

In short, fascist Felix is a Synarchist, by expressed faith and by practice, a specimen cast in the tradition of dictator Mussolini's and Adolf Hitler's bankers of the 1920s and 1930s. He is not merely typical of the traditional practices of that collection of Synarchist scoundrels who brought Mussolini, Hitler, Franco, and their like to power during 1922-1945; he is, as the legacy of Banque Worms attests, fully witting of the evil he does.

The evidence supporting those characterizations which I have just summarized, is abundant, and conclusive, if anyone cared to debate the matter.

Otherwise, Middlebury, Vermont's filthy Felix is, like the feral coyote he much resembles, as clever (and as dirty) as a coyote in a feral sort of way, but not very intelligent—in fact he is an oafish boor—in matters of art, science, or morals. He is clever as a thief who knows how to steal money, but has no wish to know actually how to earn it. He has no understanding of economics, and no desire to understand that subject, since any form of rational behavior would conflict with his professional standing, that of the poor boy who achieved fame as the Charles Dickens' Artful Dodger in today's financial world.

Therefore, if you are fully sane and rational, you will consider the current rash of such wild-eyed libels against me personally, as marks of the high position of honor which I have earned in the world in recent times.

You might also wish to amuse yourself by noting the list of characters who have exposed their own disgusting morals in this matter, beginning with the Boston Globe (the sometime voice of Dracula's Vault), the leading Swiss daily, Neue Zuercher Zeitung, a leading French TV institution, certain political circles in Leipzig, and a few present and former members of the U.S. Congress.

Filthy Felix, anyone?
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oh oh. bump
Optimistic Aussie from Perth  (OP)

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It all fits.



This article appears in the April 21, 2006 issue of Executive Intelligence Review.

[link to www.larouchepub.com]


Behind the Generals' Revolt
by Jeffrey Steinberg

On April 15, Lyndon LaRouche hailed the actions by a group of retired flag officers, demanding the immediate firing of Defense Secretary Donald Rumsfeld, as both "unprecedented" and "appropriate, given that the nation is being betrayed."

In the week preceding LaRouche's comment, some of America's outstanding retired military commanders, including Gen. Anthony Zinni (USMC-ret.), Maj. Gen. Paul Eaton (USA-ret.), Lt. Gen. Gregory Newbold (USMC-ret.), Lt. Gen. Paul Van Riper (USMC-ret.), Maj. Gen. Charles Swannack, Jr. (USA-ret.), Maj. Gen. John Riggs (USA-ret.), and Maj. Gen. John Batiste (USA-ret.), all surfaced with public calls for Rumsfeld's immediate ouster, on the grounds that he had ignored the advice and warnings of his military commanders and had, as the result, drawn the United States into a disastrous fiasco in Iraq, which is now on the verge of erupting into a full-scale, uncontrollable civil war.

While the criticisms of Rumsfeld by the ex-officers ostensibly focussed on Iraq, sources close to the Pentagon have confirmed that the outpouring of calls for Rumsfeld's immediate ouster have more to do with Bush Administration plans for a preemptive military strike against Iran, possibly as early as late April through the middle of May.

Ex-military and intelligence sources report that a group of active duty generals and admirals have written to Gen. Peter Pace (USMC), Chairman of the Joint Chiefs of Staff, threatening to resign, if the White House orders military strikes against Iran. The generals and admirals, according to the sources, are particularly outraged that the White House has refused, ostentatiously, to rule out the use of tactical nuclear weapons against hardened targets inside Iran.

Furthermore, while the generals' ire has been directed at Rumsfeld, they are collectively aware of the fact that the true architect of the Bush Administration's perpetual war policy, including the plan to launch preemptive nuclear strikes against Iran, is Vice President Dick Cheney. Unlike Rumsfeld, who can be fired by President George W. Bush at any moment, the Vice President was elected to office, and his ouster is politically more complicated. The constitutional complications are vastly compounded by President Bush's severe psychological dependency on the Vice President, and Mr. Bush's deteriorating state of mind, as he tries to avoid the unavoidable reality that his Presidency is in a free fall, and that he has been personally written off by a vast majority of Americans, including a majority of Republicans, all the way up to the U.S. Congress.
The Looming Monetary Blowout

The picture, however, is incomplete without identifying the principal factor driving the immediate crisis: the imminent collapse of the entire world floating-exchange-rate monetary system.

This crisis is compelling those financiers of the Synarchist (Fascist) International, who control Vice President Cheney, to distract attention from the monetary blowout, by going for a preemptive war against Iran. Under such circumstances, they will go, once again, for dictatorship, as they attempted, with only limited success, following the attacks of 9/11.

Inside the United States, this apparatus is most publicly identified with Felix Rohatyn and George Shultz, and is associated with a Boston- and Geneva-centered apparatus of banks, brokerage houses, and hedge funds, known in New England as "The Vault." Through institutions like Credit Suisse/First Boston, this crowd of openly Synarchist bankers maintains ties to those in London and in continental Europe, who are the descendants of the financial backers of Hitler, Mussolini, Franco, and the Vichyites in France. Their policy today is an echo of the perpetual war impulses that led the Synarchist bankers of the 1930s Young Plan era to install Hitler and the Nazis in power, to provoke a war across Eurasia.

These bankers know perfectly well that the disastrous 19-year reign of Alan Greenspan at the Federal Reserve has produced a derivatives and real estate financial bubble that is unlikely to survive through the Spring. The coordinated efforts of leading central banks in North America, Western Europe, and Japan to orchestrate a "controlled" deflation of the bubble, through interest-rate hikes, and the drying up of the yen carry-trade, is doomed to fail. In fact, as LaRouche has warned, the efforts to reverse the Greenspan "wall of money" hyperinflationary policy, will only accelerate the bursting of the real estate bubble.

Add to this the growing alarm on the part of the Synarchists, that they have not succeeded in crushing the Franklin Delano Roosevelt American System policy impulse within the Democratic Party. Two sets of recent developments underscore this latter factor.

First, under the personal initiative of Felix Rohatyn, a series of coordinated slanders have been published in recent days, targetting Lyndon LaRouche and the LaRouche Youth Movement, which is the fastest growing institution among young Democrats in the United States, and which has parallel, expanding youth organizations throughout Western Europe. The major slanders appeared in the Boston Globe, the Neue Zürcher Zeitung in Switzerland, and on the French broadcasting network, France Inter.

Responding directly to these attacks, LaRouche issued a brief statement: "Felix Rohatyn's Jewish ancestry did not deter him from organizing the financial backing for the Nazi gang associated with Augusto Pinochet's Chile dictatorship and the related fascist death-squad operations in South America's Southern Cone. Perhaps the European antifa ('anti-fascist') crowd is just a front for the neo-Nazis who have been 'earmarked' to call themselves the left."

Rohatyn, who, along with George Shultz, has been an architect of the "privatization of war" policy of Cheney, Rumsfeld, and Halliburton, makes no bones about the fact that he asserts the primacy of private financial interests over sovereign governments—including in the area of infrastructure investment.

Rohatyn's Synarchist ideas were echoed in the second development. On April 14, the Wall Street Journal reported, in a front-page story, that Treasury Secretary John Snow, in a speech at the University of Mississippi on April 12, had launched into an attack against former Treasury Secretary Robert Rubin and the Hamilton Project, a Brookings Institution-housed effort by a group of former Clinton Administration economists, to shift the nation's economic policy from its current catastrophic course. At a Brookings briefing launching the project, Rubin had invoked Alexander Hamilton, the first Treasury Secretary of the United States, whose policies of national banking and directed Federal government credits for infrastructure and education, had built the U.S. economy. Snow, babbling like a true spokesman for the Bush Administration, lied that Hamilton was a free-trade proponent and advocate of the "private sector," and that, in pushing "for a larger government role" the Hamilton Project had "misappropriated" Hamilton's name.
Cheney at the Epicenter

While the accelerating time-table of the financial collapse is the leading factor, driving the Bush Administration to a possible preemptive strike on Iran, another issue is also driving the Synarchist crowd to desperate near-term measures.

Vice President Cheney, the point-man for Shultz and Rohatyn, has once again emerged as the central figure in the Valerie Plame leak probe by Special Counsel Patrick Fitzgerald. Valerie Plame, the wife of former Ambassador Joseph Wilson IV, was outed as a CIA officer in a July 14, 2003 syndicated column by Robert Novak. Ambassador Wilson had conducted a fact-finding trip to Niger in February 2002 on behalf of the CIA, to probe unsubstantiated intelligence reports that Iraq was seeking large quantities of uranium from that African state. The CIA had been tasked to pursue the Iraq-Niger story by Vice President Cheney.

Wilson reported back to the CIA that the allegations were false, and when he began making noises that the Bush-Cheney claims of an Iraqi nuclear weapons program—a key justification for the Iraq invasion—were known to be false by top Administration policymakers, Cheney ordered a campaign of leaks to discredit the ex-Ambassador.

As the result of a series of recent court filings by Fitzgerald and by attorneys for Lewis "Scooter" Libby, Cheney's former chief of staff, now under indictment for obstruction of justice and lying to a grand jury, new evidence has surfaced, identifying Cheney as the architect of the Plame leak. Fitzgerald's April 12, 2006 thirty-nine-page filing, nailed the fact that a plot existed at the White House, centered in the Office of the Vice President, "to repudiate Mr. Wilson before and after July 14, 2003."

While Special Counsel Fitzgerald had reportedly intended to take up Cheney's role in the Plame leak after the November 2006 midterm elections, the timetable has been radically altered, and Cheney's head is now on the political chopping block, as the discovery battle in the Libby case reaches a showdown moment over the next weeks.

A senior intelligence community source acknowledged that the moment that Cheney's role as the author of the Plame leak is proven, and an indictment appears likely, Cheney will be forced out.

A timely departure of the Vice President and the Secretary of Defense is the kind of shock that is now desperately needed, to assure that the Bush Administration does not push the button on Iran, triggering events that no one is prepared to handle.

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Johnny Danger

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WB OAP. I've been bearing the brunt of the attacks during your absence. Great News your putting up. Do you really think with Katrina and all the housing bubble is about to burst? I mean, the one place that should be booming with housing is down in Mississippi, Alabama and Louisiana.

John
Johnny Danger

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I mean, as far as new construction projects.

John
Optimistic Aussie from Perth  (OP)

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Johny, g'day.

Yes i believe the economy is ready to crash ... understand the hedge fund saga going on with commodities surge and how the yen carry trade which has been financing all the speculation, now ending. ... it's end time for this system.

GM going bankrupt. That in itself will set of a hedge fund blowout. Massive amounts of derivatives tied to GM. Shocking.

As for Katrina and a housing boom in the region. What reconstruction in essence???..the area is doomed under present policy. Been left to rot i've noted. And it's flat broke.

And if Iran is attacked ... that will blow the economy also. ((((Multiple)))) bubbles are ready to pop.
Johnny Danger

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I can only give highlights of the Dr. Tatayana Koryagina Interview. I have the CD Version, but it got scratched, so I merely took the highlights and built it into a web page. Your totally correct in your assessment, and it is being planned to be so.

[link to truth4you.no-ip.org]

Forgive the crudity of the page. I threw it up in a hurry, in an effort to get this word out.

Seems like the days of keeping up with the Joneses is about to pass.

John
Optimistic Aussie from Perth  (OP)

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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
This glossary appears in the May 27, 2005 issue of Executive Intelligence Review.
Glossary of the Global Financial Casino

Hedge Fund: A form of mutual fund used by wealthy individuals and institutions to engage in aggressive speculative activities prohibited to ordinary mutual funds. Hedge funds are restricted by law to no more than 100 investors per fund, and these investors are presumed to be sufficiently knowledgeable to understand the risks. Most hedge funds have extremely high minimum investment amounts ranging from $250,000 to well over $1 million.

Derivative: A financial contract whose value is derived from the performance of assets, interest rates, currency exchange rates, or indexes. Derivative transactions include a wide assortment of financial contracts including structured debt obligations and deposits, swaps, futures, options, caps, floors, collars, forwards, and various combinations thereof.

Credit Derivative: A contract between two parties which uses a derivative to transfer credit risk from one party to another, in exchange for a fee. For example, an investor who owns bonds issued by General Motors might buy a credit derivative from his investment bank, which will pay off should General Motors default on the bonds. In return, the investor pays the investment bank a fee, which the bank considers sufficient to run the risk that it will have to pay. If there is no default, the bank makes a tidy profit.

Collateralized Debt Obligation: CDOs are securities backed by pools of assets, mainly non-mortgage loans or bonds. In exchange for interest charges, buyers of the CDOs bear the credit risk of the collateral, which means that if any of the loans or bonds in the pool are not repaid, the holders of the CDOs take the loss. CDOs are made up of tranches, with various maturities and risk characteristics, with the equity tranches carrying the most risk, and therefore paying the highest interest rate to the buyer.

Capital Structure Arbitrage: A form of arbitrage which exploits differences in the pricing of a company's stock price and its debt. These bets are growing rapidly because of the development of the credit derivatives market.

Over-the-Counter Derivative Contracts: Privately negotiated derivative contracts that are transacted outside of organized exchanges.

Exchange-Traded Derivative Contracts: Standardized derivative contracts transacted on an organized exchange, and which usually have margin requirements.

Off-Balance Sheet Derivative Contracts: Derivative contracts that generally do not involve booking assets or liabilities (for example, swaps, futures, forwards, and options).

Swap: A deal in which two counterparties agree to swap the cash flows from different financial instruments, such as securities paying fixed and variable interest rates. A Credit Default Swap is a form of credit derivative in which the buyer pays the seller in exchange for an agreed-upon payment should the specified "credit event," such as a default or the breaking of a loan covenant, occur.

The reader is advised that the technical descriptions above do not begin to do justice to the insanity of the processes they describe. Credit derivatives, for example, do not really provide protection against a default, since the institutions which issue them are often in precarious financial positions themselves, and sell the derivatives because they are desperate for the cash flow. In the current environment, a credit derivative is mainly used to provide the accounting fiction that certain mostly worthless assets on a company's books still have value. The derivatives market, overall, is designed to hide the bankruptcy of the system by providing virtual assets to paper over gaping holes in the system, as well as garnering cash flow from selling mafia-like protection to companies ravaged by market manipulations. One of the chief agencies of such manipulations are the hedge funds, which act as front men for the Anglo-American central banks and their sibling financial institutions. George Soros is a prime example of this phenomenon.
—John Hoefle

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Optimistic Aussie from Perth  (OP)

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"and it is being planned to be so."

Thank the City of London.
Optimistic Aussie from Perth  (OP)

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Silver up chorus ...joking folks.


But why is it up.??

[PDF] HedgeFundLootingIs FuelingHyperinflation

[link to www.larouchepub.com]
Optimistic Aussie from Perth  (OP)

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Shadow, that pdf link has all the info on Copper.
Optimistic Aussie from Perth  (OP)

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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
Related info from last week.

[Sources: April Finan. Times, Bloomberg, wires]

COMMODITY PRICES SOAR, RATE OF INCREASE OF THE SUPER-INFLATION INCREASES, DEFINING HYPERINFLATIONARY BLOWOUT. Lyndon LaRouche's September 2005 "Hyperinflationary Patterns" emphasizing its Riemannian shock-wave model, is unfolding fully in the commodities field.

Fools are pouring in money on each twitch of the market. "There is a wall of investment money moving into commodities markets," said UBS analyst John Reade April 12. "We estimate around $100 billion was invested via the Goldman Sachs index, the Dow Jones/AIG index and products tracking those [commodities] indices at the end of 2005." The cited investment funds are invested into so-called "passive indices"; they mimic the performance of commodity prices. However, there are hundreds of billions of dollars more that are invested in "active funds" that are "actively" invested, which if taking long positions, forcefully push up commodity prices. The size of all investment in commodities could be one-quarter trillion dollars or more; moreover, this is coupled with sizeable leverage.

The commodities prices' defining characteristic is an increase in the rate of increase. For example, between March 31, 2003 and Dec. 30, 2005 (the last day of trading), the price of palladium rose from $170 to $257 per ounce. For that whole 33 month period, its rate of price increase was 51.1% rate; its average rate of increase came out to a hefty 18.6% per year during that span. However, since the start of the year, palladium's price has subsequently jumped from $257 to $348 per ounce by April 12, which were it to continue, would come out to an increase 132% for the year 2006.

Between March 31, 2003 and Dec. 30, 2005, a metric ton of aluminium increased in price at a rate of 13% per year; for 2006, its annual rate of increase is 72%. For a metric ton of zinc, between March 31, 2005 and Dec. 30, 2005, its price increased at a considerable—inflationary—rate of 55% per year; for the year 2006, its annual rate of increase is 220%.

This underlying process of Weimar Germany is exactly as LaRouche forecast last September.

However, the bankers have built such a speculation-laced financial system that whatever they would do to try to save one bubble, will rupture another. The central banks could attempt to break the commodities price spiral by "traditional central banker methods," i.e., raising interest rates. However, the U.S. housing bubble is beginning to contract, severely affected by the rise in mortgage interest rates during the past nine months. An increase of interest rates by 1 to 2 percentage points would puncture the U.S. housing mortgage bubble, which counting the derivatives of Fannie Mae and Freddie Mac, totals $15 trillion.

WASH DC, April 11 (EIRNS)—A CITIBANK VICE PRESIDENT BACKED UP ROBERT RUBIN'S WARNING THAT THE US HAD BETTER CORRECT ITS ECONOMIC POLICIES OR IT WILL CREATE A GLOBAL DISASTER. Michael Andrews, a Citigroup VP for International Business Affairs, speaking at a Washington conference on Thailand, was asked by EIR to comment on the recent speech by Citigroup's Robert Rubin, warning that the failed US economic policies were driving the dollar towards a collapse. While the audience tittered, Andrews responded most seriously, saying that, while his friend of 22 years was not speaking for the Bank, Rubin was "sending out a warning shot, that US economic policies must be reformed, to contain the debt, and deal with the imbalances. What determines currency exchange rates is ultimately the underlying economic policies—if they are unsound, that will eventually show itself in exchange rates." He then discussed the continued strength of the Thai economy, but added: "If your characterization of the dollar fall is realized, it will do a great deal of damage throughout the world."

[Source: San Diego Daily Transcript, April 10; FDIC]

FEDERAL DEPOSIT INSURANCE CORPORATION ON MARCH 23 HELD A FORUM ON THREATS FACING BANKING SECTOR, HIGHLIGHTING A REAL ESTATE BUST. The FDIC, which bails out a failed or failing bank, described the roundtable as "scenarios for the next U.S. recession," citing three key economic and banking risk concerns—energy price spikes, a housing slowdown, and mounting household debt. In particular, "changes in the structure of mortgage lending could pose new risks to housing," through interest-only and payment-option mortgages, causing "significant payment shock" for borrowers and losses for local banks and thrifts.

Bank exposure to mortgage and home equity lending is now at peak levels, the FDIC said, as 1 in 4 family residential mortgages and home equity lines of credit have risen to account for a combined 28% of total loans and leases in the fourth quarter of 2005.

[Source: WSJ B1, April 12]

HOTTEST HOUSING MARKETS NOW COOLING THE QUICKEST. Double-digit declines in sales are hitting areas that have seen the biggest price surges in the last 5 years—Florida, California, and Washington D.C. The months-long "drop-off in sales and rising supply of homes could soon put downward pressure on prices." The slowdown reflects: 1) many speculators have started to dump homes; 2) high prices and rising interest rates have reduced affordability; and 3) potential buyers of second homes have pulled back.
Optimistic Aussie from Perth  (OP)

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The commodities bomb ... silver, copper, oil etc etc.

Excellent information.

[PDF] CommodityHyperinflation:Bomb AttheEndofIran-WarFuse

[link to www.larouchepub.com]
Optimistic Aussie from Perth  (OP)

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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
Cop this!


"The company with the famous cash reserves is now scraping for cash, trying on March 30 to sell its share of Isuzu Motors for $340 million, after having raised $2.7 billion by selling out of Fuji Heavy Industries, Suzuki Motors, and Daiwoo. But the statement by UAW leaders Ron Gettelfinger and Richard Shoemaker on March 31—that if Delphi's outrageous actions are approved by the bankruptcy court, "it will be impossible to avoid a long strike"—could mean early bankruptcy for GM.


***********************************
And that in turn promises a blowup of the global credit derivatives market. A Reuters March 29 story was headlined "Credit Investors Ponder a GM-Sized Hole in the Universe." The article reports, "For bond investors, a GM bankruptcy [brought on by a strike] would be hard, but a GMAC bankruptcy would be disastrous," because so much of the credit derivatives markets involve GM/GMAC debt. "To be blunt, it would be total carnage," a Standard & Poor's analyst was quoted. That prospect did not prevent S&P from downgrading GM debt again on March 30, to six levels below junk bonds."


***********************************

This article appears in the April 7, 2006 issue of Executive Intelligence Review.
Congress Reads `My Pet Goat'
As Planes Hit U.S. Auto Towers

[link to www.larouchepub.com]


by Paul Gallagher

Perhaps the most devastating week in the U.S. auto industry's long history ended on March 31 with a mild letter of protest by 14 Members of Congress, but no sign of movement towards action to preserve and use America's most versatile industrial capability.

While the 50,000-worker Delphi Corporation was demanding clearance in bankruptcy court to virtually liquidate itself in North America, and General Motors was in a desperate scramble to try to avoid bankruptcy, U.S. overall auto sales in the first quarter fell below the level of 1999. Clearly, at least 50% of the unparalleled machine-tool capacity represented by the auto sector, is effectively now unused, awaiting a move by a Congress which is informed how to intervene to use it, but lacks the will. Should its inaction continue, the United Auto Workers will be forced into a long and damaging nationwide strike, and scores of modern tool-and-die floors and hundreds of machine shops in the auto sector will "be turned into concrete slabs in a year," as one auto unionist warned early in the week.

The alternative has been before Congress in outline for a year, in a series of memos by Lyndon LaRouche beginning April 2005, on "retooling auto" for other vital production. Should auto's capacity be shut down permanently rather than diversified, LaRouche warned in "Auto and World Economic Recovery" in September 2005, the formerly industrial United States will sink to virtual Third World economic status, unable to recreate or even maintain its own economic infrastructure.

As if to drive the point home: On the same day the 14 Congressmen complained about Delphi's abandonment of its North American production and workforce, the Administration acknowledged that it had lost control of both the cost and the performance of contractors rebuilding the levees of New Orleans and Southeast Louisiana for the Army Corps of Engineers, and may be unable to get the work completed at all—certainly not before the 2006 hurricane season hits this Summer. It is just such major, modern infrastructural tasks and projects to which, historically, the nation has been able to turn the versatile (and underutilized) auto industry at critical moments—from building tanks and planes, to railroads, to space rockets and satellites.
A 40% Industry Shrinkage

The incredible shrinking U.S. auto industry headed for strikes and general bankruptcy at the end of March. GM and Delphi announced offers attempting to flush as many as 40,000 more "excess" workers out of the industry in 60 days, by retirement buyouts at GM's expense. The idea that this would soften Delphi's demands to cut its workers' wages by up to 60% in bankruptcy court, were dashed almost immediately, when Delphi, on March 31, asked New York bankruptcy judge Robert Drain to throw out its contracts with the UAW and the International Union of Electrical Workers (IUE). That day, Delphi's pirate CEO, Steve Miller, told the court what UAW leaders had learned three-four days earlier: that the company also wanted to close or sell 20 of its 28 plants in North America, eliminate 75% of its 48,000-strong productive workforce, walk out of many of its supply contracts with GM, and abandon its pension plan costs either to GM or the Federal Pension Benefit Guaranty Corporation. Delphi would thus use the bankruptcy court, if Drain allows it, to become, in effect, a U.S.-based holding company, run by participating private equity funds, for almost entirely outsourced auto parts production. These 20 auto-parts production plants are even more machine-tool rich than the auto production and assembly plants.

GM, which was supposedly to provide the cash for the multi-billions in charges resulting from all this, is being driven toward bankruptcy by it. Not only GM's bonds fell, but its stock actually suspended trading in the NYSE's final hour on March 28, then fell by 4% when traded March 29. This followed news that: accounting reports of both GM and its financial division, GMAC, have to be redone for 2003-05, and there are market rumors of large hidden losses on GMAC's books; new Security Exchange Commission subpoenas have been issued to both GM and GMAC for accounting investigations; GM's planned sale of 51% of GMAC to raise cash, is threatened; and GM acknowledged on March 28 that it may have lost access to its $6.5 billion bank credit line.

The company with the famous cash reserves is now scraping for cash, trying on March 30 to sell its share of Isuzu Motors for $340 million, after having raised $2.7 billion by selling out of Fuji Heavy Industries, Suzuki Motors, and Daiwoo. But the statement by UAW leaders Ron Gettelfinger and Richard Shoemaker on March 31—that if Delphi's outrageous actions are approved by the bankruptcy court, "it will be impossible to avoid a long strike"—could mean early bankruptcy for GM.

And that in turn promises a blowup of the global credit derivatives market. A Reuters March 29 story was headlined "Credit Investors Ponder a GM-Sized Hole in the Universe." The article reports, "For bond investors, a GM bankruptcy [brought on by a strike] would be hard, but a GMAC bankruptcy would be disastrous," because so much of the credit derivatives markets involve GM/GMAC debt. "To be blunt, it would be total carnage," a Standard & Poor's analyst was quoted. That prospect did not prevent S&P from downgrading GM debt again on March 30, to six levels below junk bonds.

Production employment in the U.S auto/auto parts sector as a whole, which was at 1.3 million as recently as 2000, has plunged by 240,000 jobs net since then. But as of the third week of March, with the shocking "retirement buyout" announcements made by GM and Delphi, combined with shrinkages planned by Ford, Chrysler, and a host of parts makers—the miserable prospect is that another 300,000 net jobs will be gone by 2008 or sooner. (Studies by the Chicago Federal Reserve and others have shown three to four auto-supply jobs disappearing for every one in auto production and assembly). Thus, a devastating 40% loss of employment in auto in less than a decade, and a corresponding loss to the nation of high-technology industrial and infrastructural capacity.

The shrinkage of auto is a global phenomenon, and the result of globalization. Auto sales worldwide in 2005, for the thrilling Toyotas and the boring GMs alike, fell or stagnated everywhere outside China, India, Brazil, and Mexico. Total auto sales in the United States, which are going at a 16.7 million annual rate so far in 2006, were 16.9 million in 1999, when the United States had 20 million fewer people. Not surprising, when real wages have fallen three of the past four years, household debt is an all-time record portion of household income, and the savings rate has been zero or negative for 12 consecutive months in February. The same real-wage factors of globalization have lowered auto sales in Europe and Japan, and created intense pressures for cheaper and cheaper wages—even as metals and other supply prices have hyperinflated for three years.
Election Inaction?

The falling real wages of globalization are not reversible by more intensive globalization, which is leading instead to a financial blowout. President Bush's "let the free market handle auto" stance is typically, dangerously incompetent. The Congress, confronting 50% "excess" capacity in auto, along with painful and worsening unmet infrastructure needs laid bare, among other events, by the hurricanes of 2005, has a clear path. Facing the same conditions before, as in 1939-40, we have "retooled" auto, with government credit and under definite mission-oriented reorganization, to meet the nation's prime economic or military needs.

Where is the Congress—where are the Democrats—in this auto crisis? In a self-declared election season, in which promises are stressed and action is discouraged? The danger is that both the promises and the inaction are being paid for by financial-contributor networks of Felix Rohatyn's "Democratic" faction of synarchist financiers. These happen to include—in Rohatyn, Kirk Kerkorian, Mike Steinhardt of Cerberus Capital hedge fund, Wilbur Ross, and Steve Miller, Kohlberg Kravits Roberts, etc.—the same financial networks tearing up the auto industry.
Shadow

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Canada
04/18/2006 09:54 AM
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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
Thanks OAFP!

An aside: My father-in-law was in mining all his life, said the only time copper really takes off is during/before war. I'd link it to Iraq, but Iraq started in '02 and copper only started to move in '04 from lows of about $0.63/lb. But it didn't take off before Iraq 1dunno1
Over the side and damn the barracuda
BVNDY
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United States
04/18/2006 10:23 AM
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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
"COMMODITY INFLATION" ?
WHAT the FUCK is that?
Sounds like another part of the myth of modern so called "economists", that there are certain kinds of inflation, when inflation is simple really, too much money chasing too few
goods.
WE'VE had a global economy for the last few decades, the first time in history really, and we've been able to pump money into the system, becaause the system is so large, but now we are awash in a sea of dollars, and are about to go thru the first global HYPERINFLATION , you can call it "commodity" or what ever, its simply politicians running thge printing presses, and with electronic transfers they dont even have to do that, just hit a button on a computer, move a comma a few spaces over, and
VOLIA...
INSTANT MONEY.
WE are in the shit, however, NO MATTER WHat YOU CALL IT dance
Optimistic Aussie from Perth  (OP)

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Australia
04/18/2006 10:29 AM
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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
Agreed Bundy, we are in the shit.
Optimistic Aussie from Perth  (OP)

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Australia
04/18/2006 10:33 AM
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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
Takes ages on dial-up grrrrrr

Economic Geography: Auto's Decline and the U.S. Industrial Heartland (PDF)

Dreadful stuff.

[link to www.larouchepub.com]
Optimistic Aussie from Perth  (OP)

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Australia
04/18/2006 10:35 AM
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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
Shocking crisis now in the making.

"for every 100 automobiles built, there's 27 related jobs. So, the impact, after you've built 15 million cars in the world last year"


[link to www.larouchepub.com]


Sweazy: Yes, you know, something that most people don't even take a look at, is the reciprocating, or the ill-effect of unemployment: Regardless of what area you're in, when there's high unemployment levels, you have social ills. And we've seen that in major cities throughout the United States. But, in the auto industry, for every 100 automobiles built, there's 27 related jobs. So, the impact, after you've built 15 million cars in the world last year, the impact of this can be devastating, not only to the United States, but throughout the world. And if this domino effect would take place, you're looking at an economic crisis, which could cause disaster for the nation and our communities.

So, we've seen so many times in the past, that communities, the social level, by which I mean the poverty levels, your population decreases because people want to move to where jobs are. All the social ills associated with disease, everything becomes a prominent factor, and then you see the total deterioration of a community such as Detroit, which had 2 million people in its heyday; less than 900,000 people live there today. There's as many boarded-up homes as there are occupied. And it's a disaster financially for that community.
OAFP (OP)
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Australia
04/18/2006 11:04 AM
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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
With EAT shitting everywhere, i'll bump this above it.
Jack Carcano

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Netherlands
04/18/2006 11:05 AM
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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
You people have been saying that the economy is on the brink of collapse since the seventies... And guess what? Nothing happened.

Why would this time be any different?
OAFP (OP)
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Australia
04/18/2006 11:09 AM
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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
Jack Carcano.

"It is notable here, that I have made less than a dozen professional's forecasts in the course of my career as an economist."

Pick one which failed to come to fruition.
Shadow

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Canada
04/18/2006 11:13 AM
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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
>Why would this time be any different?<

[link to bigpicture.typepad.com]

Greed.
Over the side and damn the barracuda
OAFP (OP)
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Australia
04/18/2006 11:16 AM
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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
"And guess what? Nothing happened."

Nothing happend since the seventies hey ... are you sure about that?scratching
captain obvious
User ID: 82891
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04/18/2006 01:06 PM
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Re: Hello. Warning,!! The Great Leesburg Bust of 2006. Bankers Association Warns of Bust...Heads Up, Updates posted. Lot's happening, Headspin
Yes, Carcano, we have and it has never looked more probable than it does today.





GLP